Skip to main content
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Digital Health
    • Transformation
    • ESG
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • Newsletters
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Providers
June 23, 2017 01:00 AM

Antitrust regulators challenge Sanford Health's N.D. physician group merger

Alex Kacik
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    The Federal Trade Commission and North Dakota Attorney General challenged Sanford Health's proposed acquisition of the physician group Mid Dakota Clinic, alleging the combined group would have at least a 75% share of the physician primary care market in Bismarck, N.D.

    The two regulators asked a federal district court in North Dakota to halt the deal, which would combine Sanford's 40 hospitals and 250 clinics with Mid Dakota's 61 physicians, six clinics and an ambulatory surgery center.

    The transaction would create a group of physicians with approximately 75% to 85% percent market share in adult primary care physician services, pediatric services and obstetrics and gynecology services. It would be the only physician group offering general surgery physician services in the Bismarck-Mandan region, according to the FTC's and attorney general's complaint.

    Sioux Falls, S.D.-based Sanford also sells health insurance in four states, including North Dakota. In the Bismarck-Mandan area, where Mid Dakota primarily operates. Sanford's Bismarck subsidiary has a 217-bed general acute care hospital and a network of primary care and specialty clinics, employing 160 physicians.

    The competition between Sanford and Mid Dakota to join commercial insurers' provider networks has encouraged the companies to improve technology and provide patients with accessible services, among other care improvements, according to the FTC.

    "This merger is likely to reduce significantly the competitive options available to medical insurance providers, which in turn will lead to deteriorating terms for provision of medical care, including higher prices and lower quality," Tad Lipsky, acting director of the FTC's Bureau of Competition, said in a statement.

    Sanford and Mid Dakota said the regulators got their facts wrong and plan to "vehemently defend efforts to enhance medical care in central and western North Dakota." The administrative trial is set to begin in November.

    "The best way to describe our reaction is that we are exasperated with the delay that the FTC's inquiry has already caused, and that these proceedings will continue to cause," Dr. Shelly Seifert, Mid Dakota Clinic board chair, said in a statement. "It is very disappointing because patients rely on us to continually look for ways to enhance care, improve quality and expand service and access for them and their families. That's exactly what this merger does."

    Regulators have been closely eyeing vertical acquisitions, especially as more providers look to snap up physician practices to increase referrals amid dwindling inpatient admissions. They also aim to streamline clinical operations, improve outcomes and lower costs to satisfy value-based payment methods.

    While hospital executives claim that these types of acquisitions will drive operating efficiencies, critics worry that the combined entity will have increased leverage when negotiating rates with payers, leading to higher costs.

    "The evidence shows that when physician practices are acquired by hospitals, three things happen: Prices go up after the acquisition, total spending goes up and referral patterns change," said Martin Gaynor, professor of economics and health policy at Carnegie Mellon University. "All those are causes for concern."

    That being said, not all vertical integrations are anticompetitive and lead to higher costs, Gaynor added.

    Dr. Anthony Iton of the California Endowment offered a different take, arguing that vertical integration facilitates streamlining care.

    "Vertical integration is good for care quality, patients and communities," he said.

    Last month, California providers Cottage Health and Sansum Clinic walked away from their proposed vertical integration after fighting regulatory concerns for around four years. The nonprofit healthcare providers announced their plans to merge in 2013, aiming to join Cottage Health's three-hospital system with Sansum's 23 ambulatory clinics and the only medical foundation in the region.

    Also in May, a federal court approved the divestiture of Saltzer Medical Group from Idaho-based St. Luke's Health System. The merger of the nonprofit providers, initially approved in 2012, combined the six-hospital St. Luke's with the 44-physician Saltzer Medical.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    The Check Up: Bobby Sepucha, Interwell Health
    The Check Up: Bobby Sepucha, Interwell Health
    hospital mergers roundtable
    CEOs sound off on mergers, healthcare disruptors
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Modern Healthcare A.M. Newsletter: Sign up to receive a comprehensive weekday morning newsletter designed for busy healthcare executives who need the latest and most important healthcare news and analysis.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Digital Health
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • ESG
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • Newsletters
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Jobs
      • People on the Move
      • Reprints & Licensing